Massive $400 Million AVAX Unlock Incoming This Week: Here’s Everything To Know

Key Insights

• $400 million worth of AVAX tokens are unlocking this week, potentially increasing selling pressure on the cryptocurrency.
• The unlock represents a significant portion of the circulating supply, raising concerns about a price crash.
• While short-term effects are possible, weekly and daily charts suggest the bulls might have control
• Despite potential short-term volatility, AVAX still faces a key hurdle at the $50 resistance, to register further upward momentum.

Avalanche's price was very impressive, particularly in the final quarter of 2023.

As of recent, the price of the cryptocurrency has held its ground so far, and is even up by around 5% over the last week, at the time of writing.

However, there might be trouble in paradise.

The cryptocurrency is facing looming selling pressure, as nearly $400 million worth of AVAX is set to be unlocked this week, on February 21.

How will AVAX react? What are the implications of this token unlock? What are the details that investors should know about?

Find out below:

An Incoming Wave Of Selling Pressure

According to data from Token Unlocks, an incoming tranche of 10.24 million AVAX tokens is set to be released into the market on 21 February, this week.

According to the Token Unlocks app, these tokens are worth a staggering $376.61 million at the current market price of $40 per AVAX.

This is reportedly part of the Genesis distribution of Avalanche, which is set to distribute 360 million AVAX tokens to various entities, with different vesting schedules and conditions.

The upcoming 21 February unlock represents about 2.6% of the current circulating supply of of the cryptocurrency (which is about 367.51 million AVAX).

Moreover, the current trading volume for Avalanche according to CoinMarketCap, sits at around $478,649,879.

This means that the amount to be unlocked this week is about 63% of this number.

In essence, the unlock could very possibly wreck the balance between the supply and demand of AVAX and crash its price terribly.

How Likely Is Avax To Crash?

According to data from CoinMarketCap, Avalanche is already feeling the effects of this incoming dump.

The cryptocurrency has only moved up by around 0.1% over the last day, which isn't very bullish, considering how well the market has been performing in general, so far.

We can start our analyses of Avalanche with the weekly chart.

As shown by the chart below, the cryptocurrency rebounded off its 20-week EMA around $27 on 22 January, after its rejection from $50.

The outlook above lends some degree of credibility to Avalanche's bulls, and shows that any possible crashes due to the upcoming unlocks are likely to be minor.

Zooming into the daily chart, we can also see that the cryptocurrency is being supported by its 20-day EMA, as shown below.

This indicates that there might only be cause for alarm if AVAX breaks below $38.44, where this moving average sits.

Avalanche is also trading on top of an ascending trendline, indicating that the bulls are active over the medium-term timeframe.

Overall, AVAX still has a battle to fight at the crucial $50 resistance.

However, the cryptocurrency remains poised to continue further upwards, and will only be at risk if we see a break below anywhere between $38.44 to $34.

Disclaimer: Voice of Crypto aims to deliver accurate and up-to-date information, but it will not be responsible for any missing facts or inaccurate information. Cryptocurrencies are highly volatile financial assets, so research and make your own financial decisions.